MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK press
THREE TO BUY
Strix Group: The Mail on Sunday
The rising popularity of tea bodes well for Strix, the world’s leading maker of kettle safety controls. These devices turn off kettles when they boil, or if there is insufficient water, in order to prevent explosions. As new safety regulations come into force, demand will rise. Investors with a long-term view should do well, while an expected dividend yield of 5% is an extra perk. 136.5p
Tesco: The Daily Telegraph
“Retailers can never stand still – either you are in a virtuous circle or the reverse.” Tesco seems to be in the former camp, with management improving price competitiveness, and the quality and availability of its products. Last year’s spat with Unilever over the price of Marmite was “fantastic PR” in a time of inflation. The market has yet to realise that the shares are cheap. 187.25p
Vodafone: Shares
A giant of the communications sector, Vodafone supplies over 523 million mobile customers worldwide. Its 6.3% dividend yield makes it a staple for income investors. The share price has decreased amid competition worries and currency movements, but the market is overlooking the firm’s strengths as it turns in good performances. Government subsidies to roll out broadband also promise new business. 211.5p
THREE TO SELL
Polar Capital: The Times
Investors had fled this asset manager after a Japanese market downturn reduced the appeal of its flagship fund. However, after two years of net outflows it’s turned a corner. Assets under management have passed the £10bn mark and management hopes the 5.1% dividend will be covered by earnings. But at the current price, further gains looks doubtful. 489.75p
Royal Mail: Investors Chronicle
The threat of industrial action by its employees only amplifies Royal Mail’s woes. The firm is already struggling with falling letter volumes and rivals are now looking to capitalise on the proposed strikes to grab market share. Recent share-price declines have sent the firm tumbling out of the FTSE 100. Some investors may now sense a bargain, but the market’s disquiet is justified. 371p
Wood Group: The Sunday Times
This oil-services provider completed its £2.2bn takeover of Amec Foster Wheeler last week, but bigger is not always better. The competition watchdog has required Wood to sell off Amec’s North Sea operation, depriving it of £700m in revenues and bringing a new competitor onto Wood’s home turf. Add in a Serious Fraud Office corruption investigation and the stock’s best avoided. 717p
AND THE REST
The Daily Telegraph
Portfolio builders who are willing to take their chances should look at JackpotJoy, the UK leader in online bingo (809p). Aim-listed pub group Young & Co is a good choice for investors looking to avoid the net of inheritance tax (1,028p).
Investors Chronicle
Aim-listed Eland Oil & Gas is a good growth pick for those who can stomach the risks (62.5p). Wealth manager Charles Stanley is trading at a discount (390p). Concerns about the support services sector have hit shares in Babcock, but it boasts a strong order book and a solid dividend yield (823p).
The Mail on Sunday
SuperGroup looks like one of the winners in a polarising retail market (1,766p).
Shares
Share-price weakness at health and hygiene titan Reckitt Benckiser is an opportunity to buy into a high-quality, defensive stock (7,037p). North African oil and gas producer SDX Energy is heading in the right direction after a new discovery (38.25p). Buy Impax Asset Management as the acquisition of a US peer sparks new interest (150.5p).
The Times
The coming year will be a busy one for exhibitions firm Tarsus yet the shares remain a bargain on 11 times earnings (304p). The market has overreacted to a warning from packaging firm Mondi about the impact of higher costs and unfavourable exchange rates (1,926p). Shares in XP Power have come up a long way and now trade on 22 times earnings – it’s time to take profits (3,099p).
A Singaporean view
Swiss luxury watch sales are recovering, which should boost Asian watch retailer The Hour Glass, says The Edge Singapore. From January to August this year, the total export value of Swiss watches rose 1.2% year-on-year to CHF12.6bn, with sales in Hong Kong – the top export destination – up 2.9%. The Hour Glass, which operates 40 boutiques in nine cities across the region, has a solid record. The firm survived the Asian financial crisis and the Sars epidemic that pummelled sales, then took advantage of the weakness of rivals to expand its network of stores during the global financial crisis of 2008. As economic conditions improve and consumers spend more, the firm should benefit. The stock trades on 9.6 times earnings, cheaper than comparable Hong Kong-listed jewellery and watch retailers.